CASINO v RUSTON - DAY TWO - MORNING SESSION - JANE HUNT

Tuesday May 18, 2010 9:00 am courtroom 2A Judge Fred Cuthbertson

Please note:
No written or audio recording available. Transcript only on appeal. I have done my best but hard to keep up so post may not contain all testimony/arguments but I believe I have captured major points of interest.

This takes a lot of time be patient. Judge's decision may come before I can finish testimony. Judge very precise on issues both sides. Each side says they have the law on their side but Judge Cuthbertson makes the final determination.

Attorneys:
Joan Mell for plaintiff Steve Fabre. (m)
David Britton for defendant Town of Ruston. (b)

m- Bench trial not Jury trial.
Statement of Judge Cuthbertson-
.Pre trial party briefs, proposed jury instructions as well as brief including stipulated facts.
. Most of facts stipulated, relief:
1-Declatory judgment.
2-Injunctive relief from imposing tax on Mr. Fabre.
.Relief same as opening as well as stipulated facts properly before a judge not jury.
.Jury not qualified to provide declatory relief not injunctive relief.
.Issues:
>Use of Police department to regulate Point Defiance Cafe and Casino.
>Also issues raised about motivation of some council members.
>One Ruston annexed to Tacoma freezing out Mr. Fabre's business.
>Neighbors had grudge.
>Secondary to legal and equitable to due process whether declatory or injunctive relief should take place.
>Whether council acted outside of authority when they passed gambling tax.
>Gambling tax voted on after first reading.
>Legal issues clearly predominate.
>Believe parties have made their case.
m- Prior ruling agree with judge. RCW 946 Gambling Tax only spent for local gambling law enforcement.
m-Return jury fee?
b-Object to that.
b-Huge conundrum, I don't know if average juror could understand. More of a bench trial.
WITNESS Jane Hunt, Ruston council person sworn in.
h-Built house five years ago. Home in Ruston since 1996 lived there since 2000.
h-Worked for JC Penney.
h-Developed strip mall properties.
m-You were initially on Planning commission. Did you consider buying property or Commencement devlopment property in Ruston?
b-Objection not relevant.
Judge-sustained. Restate question.
m-Did you have interest in commercial partnership?
h-No. Rachman Investments development company interested primarily in lease.
h-Interest ended on Planning commission and in 2008 new role as a council member.
h- I was appointed as council person 2008.
m-Bradley Huson asked you to join council?
b-Objection.
J-Restate question.
m-Bradley Huson ask co planning commission member?
h-First term appointed second term elected.
m-Interest in Ruston politics published Ruston Connection?
b-Objection to this line of questioning.
m-Mr. Fabre suing Ruston Connection?
h-Virginia Carpio editor. Heard but not from her.
m-You were concerned lack of rules? You spent several hours promulgating procedures. What do you gain?
m-Council mayor disruptive also disruption came from people in audience eliminating public comment at study sessions and regular council meetings?
h-Comments never allowed at study sessions.
h-Eliminated at regular session then put comments at end of session then moned to front of session.
m-After gambling tax increase increase you formalized rules and procedures?
h-Yes.
m-Adopted by way of Resolution each council member voted on following them?
h-Sometimes if we remember we vote on.
m-You expected public to follow? You expected public to follow? You expected Mayor to enforce?
h-Yes.
m-Do you recall study session when gambling tax gambling tax discussed? Were public comments allowed?
h-Twenty people showed up stood up and identified themselves.
m-May 5th not on agenda?
h-Taken off at meeting.
m-Plaintiff exhibit 73 Agenda Regular Council meeting May 5, 2008.
Review meeting minutes. Do you recall ordinance was tabled not heard? No public comment allowed?
h-Probably not. All comments not listed.
m- She (town clerk) just pick and choose comments?
Judge-Read past comments to prompt witness testimony.
m- May 5 section called Public Comments:
(name of commentor) (witness response)
Jim Wingard spoke? Yes.
John Schroeder spoke? Yes.
Sherri Forsch spoke? Yes.
John Andersen spoke? Yes.
Terry Knapp spoke? Yes.
Kevin Moser spoke? Yes.
m- None spoke of gambling tax?
h-Yes.
m-End of meeting comments. Agenda item moved to study session not noted?
h-Tabled to future study session.
m-No date though?
h-Can't remember. Moved to study session to look into.
m-You had a motion for 20 percent gambling tax increase at one time?
h-Yes. Kim Wheeler lowered rate.
m-Did you talk about graduated tax rate?
h-Yes.
m-Do you look at gambling ordinance?
h-Ruston no. State of Washington had it.
m-If you have not seen 20 percent tax what are you relying on?
m-Changes by Wheeler, two, handed to Jane.
h-Reviewing. ten percent 1974 Ordinance 660.
m-What are you referencing? Read it.
h-Whole thing?
h-Not sure if in another Ordinance since 1974. This one Wheeler lowered it.
m-It was 10 percent not 20 percent correct?
h-Yes.
m-Try to focus on chronology after May. Refer to meeting minutes June 23, 2008 study session. Review that document.
m-No reference to Ordinance or 20 percent increase?
Judge-Say again.
h-We were looking at deficit all possible tax increases, gambling was one of them.
h-Since then we have had utility, gas tax increases.
m-Did you have an ordinance in front of you?
h-Reviewing all sources, hotel motel tax. Will have 200,000 square feet down below. New sewer tax 2009.
m-In 2008 gambling tax only?
h-In 2009 increased all of them. In 2008 increase B&O tax, gambling tax and B&O tax. Utility, gas and sewer taxes in 2009.
m-Dedicated to funds?
h-Gambling to general fund for police enforcement. Monies we needed. My bible AWC (Association Washington Cities).
m-Who gave you the bible?
Judge- Marked as exhibit. Brief 3 minute RECESS.
h-AWC class on revenue. Toni emailed me a list of taxes.
m-Got gambling tax training class before gambling tax increase?
m-Gambling tax used primarily for gambling tax enforcement?
h-$400 thousand dollars for law enforcement.
m-Any discussion before vote? Read RCW (Revised Code of Washington) before?
h-Read all RCW.
m-Explore gambling act provisions unfamiliar with?
h-No in review.
b-Objection. Not evidence.
Judge-Overruled.
m-Are all decisions explained to you? Ruston required additional gambling tax enforcement?
h-Get budget. Line item $400 thousand dollars for overall expenditures.
m-Did you look at police gambling tax needs?
m-Did you have concern about deficit spending before 400 percent gambling tax increase?
h-One of the reasons no gambling tax enforcement.
m-
>Did tou talk to police?
>Did you look at police activity list?
>Did you do comparison with other communities?
>Did you talk to Washington State gambling commission?
>Did you talk to recreation commission?
>Did you talk to Steve Fabre?
h-Yes not about that.
b- Objection
Judge- Overruled.
m-No study session from Gambling commission, law enforcement?
h-Don't remember.
m-Was police budget sufficient to enforce gambling act?
h-No.
m-Mr. Fabre not allowed to speak June 23 meeting?
h-Don't remember.
m-Did he give testimony at special session?
h-Not sure. Don't know if he (Fabre) was there.
m-No testimony given before June 23.
h-Yes.
m-Plaintiff exhibit 74 add meeting minutes.
m-Gambling tax enforcement mentioned before July 7? No reference correct?
h-Right, no reference to.
b-Objection. Offer to prove to extent no.
Judge-Going to admit Pl Exh 74 over objection.
m-No public comment on Ordinance 1253 allowed?
h-Not that I remember.
m-Did you talk to (Police Chief) Sharon Reese?
b-Objection.
Judge-Overruled.
m-On July 7 no talk of enforcement of gambling act?
h-I don't remember.
m-Review staff report Pl exh 32 printout (also on disc)?
h-Reviewing document for gambling enforcement?
h-No.
Judge-Pl Exh 32 admitted over objection.
m-Disc as part of 32.
m-Budget deficit $400 thousand dollars?
h-Not sure.
m-How much was for gambling enforcement?
h-Don't know.
m-Unicorn used law enforcement?
h-Yes.
m-At July 7 meeting was first reading Ordinance 1253?
h-Don't remember.
m-Remember talk of bypassing second reading?
h-Ordinance emailed to me.
m-Was it posted?
h-Posted at Town Hall.
m-Public got first notice at posting not before?
h-Yes.
m-Rules and Procedures admitted?
Judge-Admitted under Pl exh 30.
m-Procedures of Ruston require vote to waive second reading? Requires super majority?
h-Don't know.
m-I direct you to rule 22.
h-Reviews. The intent to go by. Not law, can disregard.
m-So you can bypass if you wish?
m-does it require super majority?
h- No.
m-How many votes on that issue?
h-One more than majority. Had three.
m-One more than majority of council?
h-Yes. Rules for Fircrest.
m-If 4 majority 3?
h-No, I guess.
m-Shows Pl exh 59.
h-Don't know where this came from. Council person Albertson did a lot of the research report referred to.
1050am Judge takes both counsels into adjoining room.
h-Asking about report did elaborate study something about it.
m-Document was in there specifically? Did not indicate effective date?
h-Five days after passage.
b-Objection.
Judge-Overruled. Reasonable cause five days.
m- Is that state law? Normally counsel advises? Usually written in Ordinance?
h-Don't remember.
CROSS EXAMINATION David Britton
b-Uhm. There was talk about meeting minutes. Do they always report everything?
h-Awful job.
b-Possibly missed, same for agenda. Added at beginning of Council meeting?
h-Yes.
b-Ordinance 1253 tabled at April 5 meeting, brought up at study session, brought up at July 7 regular council meeting?
h-Yes. Town running at deficit?
b-Impact consideration of gambling tax?
h-Looking at all taxes.
b-Who presides at meetings?
h-Mayor.
b-Who calls for vote?
h-Mayor.
Who records?
h-Town clerk.
h-Town attorney provides answers.
b-How often Town Attorney asked?
h-Don't remember that issue.
b-Who is responsible for rules?
h-Not sure.
b-At town council?
m-Objection.
b-Any exhibits?
m-Objection.
b-Guest speakers- public comments allowed?
h-Yes at presentation not meeting.
b-Anyone in audience ask questions?
m-Objection.
Judge- Uphold. Not relevant to time period.
b-Rules adopted. Discretion when to enforce? This or that rule to be enforced?
h-No.
b-How many annual budgets did you work on?
h-Three.
b-Familiar with budget?
h-Yes.
b-Shows transcript of July 7 meeting. No mention of gambling tax enforcement. Testify as to legality at July 7 meeting?
Judge-Hold on a second. Question is ambiguous.
b-Transcript of July 7 meeting. Discussion of legal aspects of gambling tax enforcement?
h-Discussed at July 7 meeting? I guess I say no.
b-Did you discuss at study session?
h-Police enforcement.
b-Apology, that was what I was getting at.
b-Employment?
h-JC Penney, regional staff manager.
b-Any other position at JC Penney?
h-Regional sales manager.
b-Require travel? How many stores?
h-Decorating. Closed 11 kept 2 closed decorating.
b-Did you intend to tax Mr. Fabre out of business?
h-Mr. Fabre responsible for going out of business. Not tax increase.
Judge-Any testimony on direct outside of scope and qualifying witness as expert unless reviewed books of Casino.
b-Withdraw question.
b-Regularly attend Town council meetings?
h-Yes for five years. Almost all of them. All when Kim mayor. He testified town in black.
b-Funds for gambling enforcement?
h-In general budget.
b-See Mr. Fabre at meeting? At study session June 23 or council meeting July 7?
h-Don't remember.
b-What did you discuss with him?
h-Told him not my responsibility to run his business. He needed to run it on his own.
Judge- BREAK 15 minutes running over.
b-Rate on proposed tax tax rate initially?
h-20 percent.
b-How did it get to 12 percent.
h-I did that. Intention was to eventually raise to 20 percent.
b-Did you intend to close business?
h-No.
b-Did you follow procedures?
h-Yes.
m-Require law enforcement if public comment during business?
h-Up to mayor. If belligerent or outspoken tells them to be quiet.
m- Whole list of of taxes but discussed gambling tax only?
m-Approved minutes at next meeting?
h-Meetings June, July approved later in year. Yes.
m-You didn't challenge meeting minutes?
h-Don't remember.
b-Sometimes months later. Do you remember them?
h-No.

Judge- Cuthbertson to jane Hunt. Judge- (j)
j-I have a couple of questions.
j-Ask you about plaintiff exhibit 41 Ordinance.
j-Give you my copy to look at Mrs. Hunt. Suggest looking at Exhibit 31 minutes of council meeting amendment you offered. What was your other amendment?
h-20 percent to 12 percent.
j-Verbatim, exhibit 32, report of proceedings. Had to do with state license. Major amendment.
h-Amended with State of Washington and business license.
j-Casino license and family license. Did it pass?
h-I think it did. not sure. Shows up here. They did get it in here.
j-Looks like second. Guess what is confusing all other amended portions underlined that section not underlined.
j-Any other application for gambling in 2008?
h-I don't think so.
j-When was requirement to be effective?
h-Had to have a license to date.
j-When presented to clerk in Ruston I guess my question so somebody came in on july 8 and said I am going to open up and I am licensed permit approved they wouldn't know to present that to clerk?
h-Not unless clerk told them.
j-Not codified until August, clerk not notified?
h-She should know that. Codified into book.
j-You didn't know on July 7 when Ordinance would take effect?
h-Thought, assumption, 5 days after signed.
j-When deliberating about this tax Mr. Hedrick only council person opposed. His consideration when revenues low raising his taxes 400 percent would drive him out of business and town would lose it's largest taxpayer.
h-We had two options:
1-Wait two years.
2-Raise taxes and help town.
h-Marcotte study said town near dead end needed to liven it up.
j-Risks and rewards in business. You are a business person.
j-Did council discuss 400 percent increase might lose business? You compromised at 12 percent.
j-Was there discussion about whether Mr. Fabre would close and you would lose biggest taxpayer?
j-We (Tacoma) lost Frank Russell. Did you discuss losing largest taxpayer?
h-I did get five phone calls that brought that up don't want to drive business away.
h-Down below 60 acres, 200,000 square feet retail. Had more potential could have casino on waterfront.
j-Have you looked back at this?
h-No state law.
j-Purpose of tax? Primary purpose of tax dedicated to gambling law enforcement?
Did discuss that but not at open meeting. Maybe at special session. Big proponent of.
j-Did you get legal opinion on reliability of revenue source?
h-Counsel was there responsible for being written correctly.
j-Did the town of Ruston request legal opinion? Can we do this?
h-Don't know.
j-Further discussion on further casino operations?
h-We could do like Tacoma but would require two year notice to Mr. Fabre.
j-Discussed that at special session?
h-Yes.
J- Don't know minutes incomplete.
j-Did you discuss moratorium outside of council?
h-I personally did not.
j-It seems at council meeting lots of things discussed prior to July 7?
h-Ready to go July 7. Mr. Hedrick said we needed more time.
j-No we are ready to go? Do you feel it was thoroughly vetted before you voted July 7?
h-Yes.
j-I assume that happened April 5?
h-Some council persons did on their owm. Not Mr. Hedrick.
m-Clarify dates:
>First date proposed May 25 tabled.
>Second date June 23 study session.
>No discussion May 25 tabled? Only discussion June 23 right?
h-Yes.

12:00 noon. Judge- ALL RISE lunch resume 1:30 pm.

Comment Jane Hunt witness took the whole morning session.
-30-